Saturday, 8 February 2020

Gov’t loses 42% in corporate taxes to low oil production

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February 08, 2020

Adnan Adams Mohammed

The Ghana Revenue Authority is
losing money from oil-producing companies in the form of corporate taxes as it
recorded US$51 million less in taxes between July and December, compared to
January to June 2019.

Corporate Taxes dropped from
US$121 million to about US$70 million between July to December 2019, according
to the Petroleum Funds report released by the Bank of Ghana.

This shows a 42 percent drop for
the second half of 2019, compared to the first half of the same year.
This is due to the low level of production against forecasted figures.

A study of the report shows that a
company like Tullow Oil did not make any payment in Taxes for the period under
review.

This is partly owed to the fact
that Corporate Taxes are paid on the profits of companies. Hence the failure of
the companies to remit corporate taxes implies that some of them were
unprofitable within the period under review.

For instance, local and
international media reports at the latter part of 2019 that Tullow Oil in Ghana
was operating under a 30% revenue shortfall. This was due to the company’s
failure to meet its production targets.